Financial Integrity - I'm on to something

A few months ago, I shared with you some observations about Integrity.  Since then, I have given some thought to the various decisions we make when people expect us to demonstrate "integrity" within our practices. Let's define integrity as consistency of actions, values and principles. Now consider all the areas of practice where we are entrusted to act in an integritous manner.   ("Integritous" may or may not be a real word.)

We all want to do right so we should always take steps to ensure integrity in our Patient Care, Team Leadership, and Business Management.  This helps us determine that the practice we are running is the practice we have dreamed of.  By examining our activity, we can compare our actions with our intentions.

It is within that light, that I would like to explore a new realm of Business Management,Financial Integrity.  It is different than financial management or balance sheets.  It is not just about spending control or budgeting.  Those are very important financial strategies but Financial Integrity is about the countless money related decisions we make all day, every day.  Financial Integrity is about the practice consistently making and spending money according to the principles and values of the practice.

I know it is getting kind of deep - but stay with me for one more minute.

I became interested in this when I began trying to get a handle on how we received our money.  Just so you know, it's ridiculous.

  • Most patients have some sort of insurance and we file it all electronically.
  • Some is done at checkout on the insurances website, so we "know how much to charge the patient."
  • Others are filed when glasses are ordered by the lab technician.
  • But if they don't get glasses, it is filed by someone else.
  • Medical claims are filed by our EHR program, which talks to our clearinghouse once the claim is authorized.
  • Sometimes claims are denied and need to be re-filed.

And let's not even talk about secondary insurances.  There are co-pays, co-insurances, deductibles, writeoffs, and allowables.

No wonder John Rumpakis is in such high demand!

To take a quick look at your Financial Integrity what is your answer to the following questions:

  • Does every discount given in your practice match your discount policy?
  • Does every deposit make it to the bank?
  • Is every denied claim dealt with or is it just written off?
  • Is every copay collected?
  • Does every frame, box of contacts make it into stock?
  • Is that pile of returns always returned?
  • Are you charged the correct amount for every lab job?
  • Do you get every discount you are entitled to from your lab?
  • Is it possible that your trusted staff is stealing money or stuff from the office?

For me, the answer to every one of these questions is "I don't know."  It is critical that I get to work on my Financial Integrity.

A plan to ensure Financial Integrity involves a system of constant self audits and adjustments based on the audit findings.

Systems to Evaluate Financial Integrity

As a rule, it is recommended to pick a vision and a medical insurance to audit each month.

  • Choose 10 patients from each and simply follow the trail. There can be breakdowns in fee collection, verification, filing, refiling, writeoffs and payment application.
  • And audit one big vendor per month.  We audit our optical lab and our contact lens distributor twice per year because this is where most of our money goes.  We compare prices charged with prices promoted and look for discounts that should be applied.

Systems to Improve Financial Integrity

There is always a balance to efficiency and accuracy.  When you are balancing your checkbook and you are a penny off, do you spend time looking for it, or just adjust?  What about $1.00?  $100.00?  For the practice we need to incorporate systems to make it all work.

Our nightly routine used to include balancing the deposit with the Daily Report.  But if you pay 3 people for one hour to find $45.00, you have lost money and hurt morale.  If you don't find the $45.00, you set the precedent that it doesn't matter.

We adjusted so that the report is run at the end of the day and entered into a Google Drive document.  The checks and cash are collected, uncounted, and put into the safe.  The following morning the safe is opened and the money is all deposited.  This deposit, credit card charges and EFT's are all entered into another document, without looking at the EHR report.  If the amounts matched, we are good.  If not - we investigate.

This is an example of one system we have incorporated to help us develop our Financial Integrity.  We wanted to end the day on a high note as often as possible and if we do find an accounting error, we have all day to find it. Two separate people are involved so there is less chance of shenanigans.

What other systems can we put in place to ensure our Financial Integrity?  Let me know what has worked in your practice. 

This is a hot topic right now.  More to follow.

See you soon,

Mike